Should I Focus On Wholesale?

When you’re running a small business, there are hundreds of potential things to do – with limited time. And a big factor in your success is your ability to discern the things that are highest impact–  and focusing relentlessly on doing those things.

Within this context, several questions often come up:

• Should I pursue wholesale at all?

• Should I focus on wholesale to the exclusion of other sales channels or is it also important to build sales on the retail side?

There’s obviously no one answer here. Each business has a different strategy, vision, values, and parameters so your path is yours alone. That said, there are several key things to consider in charting your path forward. The answers, of course, depend on you and your business – but I do think the questions themselves are key and quite universally useful.

Factors to consider in deciding which sales channels – including wholesale – to focus on as a small maker business:

1. what feels easeful?

When it comes to running a business, I often think of this quote: “Nothing is impossible, but almost nothing is easy.” So when I ask you what is easeful, I don’t mean what is easy or simple. I mean: what doesn’t feel like a slog, a distortion, or a huge effort? What is scary and demanding, perhaps, but still has a sense of ease and flow to it?

2. What is the profit-versus-effort for that channel, for you?

Ask yourself: “with the margins I have, will the net revenue I get from this channel be ‘worth it’ to me, given the time it will take, relative to other things?”

For instance, let’s use an example Becky did recently in deciding whether to pursue wholesale for her line of art prints:

• Becky’s profit-per-print is $5.
  

• She’s just starting with wholesale, so it might take her 5 hours per week to grow to a level of having 30 boutiques buying 20 prints from her every quarter.
  

• So she’d calculate:
  $5 x 30 boutiques x 20 prints = $3000 net revenue per quarter.
  

• That would be net revenue of $3000 per quarter for a time expenditure of 5 hours per week (once she got up to that level.)
  

• Becky would then do a similar profit-versus-effort calculation for each of her possible sales channels. And then she’d decide which one had the greatest return in this way.
  

You may not know exactly what assumptions to plug into the above calculations. But try to guesstimate! Even a rough calculation for each channel will likely give you meaningful insights. You may find that your costs, pricing parameters, and effort make some channels way more profitable than others. And if you’re struggling to make pricing work for wholesale, this article might help.

3. What is your ultimate vision?

When you think about the “best” version of your business, what sales channels do you see yourself using? And if that mix of channels is what you ultimately want for yourself, is there a good reason to use different ones now?

4. How much do you want to emphasize diversification versus focus?

Diversification is good because it limits your risk if one channel dries up (as they tend to do). It’s also good because channels often have a synergistic effect. For instance, a wholesale sale often leads to follow-on retail sales, as long as you have a strong enough website and/or social media presence to capture them.

On the other hand, focus is good because the more you focus, the greater your chance of success within any given channel. Your energies, persistence, and creativity are generally less potent when spread thin across multiple strategies.

Every business has to balance these two realities and only you know what the right balance is for you.

There's no one way to answer these questions. And there’s no one way of weighing the relative importance of your answers to each. But reflecting on these – both now and later – is powerful. And the exploration can strengthen both your choices and your resolve.

WHOLESALE IN A BOX
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This self-paced training includes everything you need to grow wholesale efficiently, effectively, and in your control.

WHOLESALE IN A BOX - WITH COACHING

Our comprehensive course on growing wholesale, for makers — plus 90 days of 1-on-1 expert coaching via email on your wholesale materials and approach.

We’re here for any questions, concerns, or thoughts: [email protected].